The GOP's ACA Replacement Is A Disgrace

It Only Serves to Hurt The Poor And Help The Rich
By Ron Shinkman

The GOP has had little use in recent years for governing, which helps explain a certain Creamsicle-tinted slab of rant currently occupying the White House.

            It also explains the American Healthcare Act, the putative replacement for the Affordable Care Act.

            First, if this relatively skinny 130 or so pages of legislation released by two House committees this week is the replacement for the voluminous ACA, it has become apparent that a repeal is off the table. It does little more than fiddle around the edges of the landmark healthcare law, but does so in ways that are not only breathtakingly cynical, but could actually trigger the death spiral Republican politicians have claimed has encircled the ACA for the past seven years.

            Although the bill would temporarily preserve some of the Disproportionate Share Hospital payments that have been gradually phased out under the ACA, the Medicaid expansion that has insured 11 million low-income Americans would be eviscerated. Within a couple of years, the federal payments that have covered most of the expansion would be pared back to per capita payments, adjusted at a rate of inflation that not only bears no relationship to reality in healthcare, but to the real world in general. The Congressional Budget Office has yet to score this, but expect around half of the expansion-era Medicaid enrollees to drop off entirely in the coming years, and the program itself eventually rendered irrelevant.

            How hospitals in California or elsewhere expect to treat poor patients and obtain payments for doing so in this environment will be a mystery. And given that the poor have had their voting rights stripped away through onerous voter identification laws in many states, their opinion bears virtually no weight at all.

            The other change involves the advanced tax credits forwarded to middle-income Americans to purchase coverage on the state health insurance exchanges. They will be adjusted toward age and income, not just income. As a result, a lot of middle-aged voters who bought into Donald Trump's cavalcade of breezy promises of something “really terrific” may actually see their premiums drop in time for his re-election effort (although I sincerely doubt that would remain the case in the long run).

            The age ratio under the ACA was originally three-to-one, meaning no insurer could charge its oldest enrollees more than three times what it charged its youngest enrollees. That has been expanded to a five-to-one ratio under this new legislation, giving insurers leeway to charge much more.

            That coming premium escalation will also be stoked by stripping away the mandate for every American to purchase insurance, which is also part of the Republican proposal. That only means the sickest people will buy insurance, driving premiums up even further. That being the case, it wouldn't be surprising to see some consumers struggling with premiums that nearly double, if not triple.

            And of course, it wouldn't be a Republican bill without some tax cuts. The tanning salon tax and the medical will be gone – a boon to rich individuals and corporations. But there are also cuts to income and Medicare taxes that amount to $600 billion over the next decade – giveaways that benefit almost no one who has less than a seven-figure income.

            The only good news here is there seems to be so much division among the GOP about this legislation that it's entirely possible that nothing will come out of it, and that repeal and replace will become a mere face-saving exercise. And then the GOP can cynically blame the Democrats due to their universal lack of support for their “reform” of the reform.

            But what has become woefully clear from this exercise is how little Republican lawmakers care about their constituents who do not have fat balance sheets or bank accounts. They could care less about them being sick, going bankrupt to treat their sickness, or simply dying because they don't have access to healthcare services. And it also seems apparent they care little about covering their tracks regarding their worldview. They only care about catering to wealthy individuals and corporations and manipulating the masses who might vote for them. This legislation accomplishes that in spades.

            But no doubt the Republicans are continuing this kabuki theater around healthcare reform because it also serves to distract from the mushrooming and unprecedented stories about a clearly unstable President and his likely collusion with the Russians to decide the Presidential election. So it actually matters little what the GOP puts out on healthcare, so long as it consumes some media attention.

            It would be much better to fix the current flaws in the ACA – such as lack of price controls on drugs – but that is simply not going to happen. The only hope is that the GOP's lack of interest in governing means the ACA remains intact, perhaps to be improved by a future Democratic President and Congress.

             But in these truly surreal and unpredictable days, assuming what was once a routine shift in powers may be a bridge too far.


Ron Shinkman is the Publisher of Payers & Providers.